KUALA LUMPUR: The ringgit opened slightly higher against the US dollar on Tuesday amid caution about the outcome of trade talks between China and the United States.
At 8 am, the local note made a small rebound to 4.2275/2370 against the greenback compared to Monday’s close of 4.2290/2345.
Bank Muamalat Malaysia Bhd’s chief economist, Dr Mohd Afzanizam Abdul Rashid, said the US dollar index (DXY) was down 0.25 per cent to 98.939 points as the US and China trade talks proceeded as planned, with positive indications from US officials about the negotiations.
He highlighted that data from China showed the country’s trade with the United States has been declining significantly, with exports and imports falling 34.5 per cent and 18.1 per cent, respectively, in May.
“The figures represented the second consecutive month of contraction, showing that the tariff shocks have had a significant impact on international trade. Meanwhile, the negative print for China’s consumer price index has been ongoing for four consecutive months, with the latest reading standing at minus 0.1 per cent year-on-year in April, indicating a challenging economic outlook given weak demand,” he told Bernama.
Mohd Afzanizam noted that the USD/MYR remained in a narrow range between RM4.231 and RM4.2458 yesterday amid cautious sentiment among traders and investors, with a similar trend expected to continue today.
In early trade, the ringgit traded higher against a basket of major currencies.
It rose against the Japanese yen to 2.9242/9310 from Monday’s 2.9344/2.9384, appreciated versus the British pound to 5.7300/7428 from 5.7392/7466 and gained vis-à-vis the euro to 4.8303/8412 from 4.8316/8379.
The local currency traded mixed against most of its ASEAN peers.
It improved versus the Singapore dollar to 3.2876/2952 from 3.2908/2953 but fell against the Thai baht to 12.9463/9846 from 12.9414/9642 on Monday.
It traded almost flat vis-à-vis the Indonesian rupiah at 259.4/260.1 from 259.5/260.0 and was unchanged against the Philippine peso at 7.57/7.59.
